On Thursday, the Federal Reserve lowered interest rates by 25 basis points to a range of 4.25%-4.50%, marking the third consecutive rate cut, in line with expectations. In the three monetary policy meetings from September to December, a total of 100 basis points were cut, including one 50 basis point cut and two 25 basis point cuts. This meeting leaned toward hawkish rate cuts, reducing the expected number of cuts next year from four to two while cutting by 25 basis points. U.S. stock indices fell, with the Nasdaq down 2% at one point, the S&P 500 down 1.5%, and the Dow Jones down 1.2%.
Back to the point:
Derek Merrin, a member of the Ohio House of Representatives in the United States, proposed HB 703 (the Ohio BTC Reserves Act), which aims to grant the state treasury the power to purchase BTC in 'appropriate asset allocation,' but does not mandate the purchase of BTC. The statement indicates that the dollar is rapidly depreciating, and Ohio must embrace technology to protect tax revenue from erosion. The European Securities and Markets Authority (ESMA) has released final guidance to assist member states in implementing upcoming regulations. The EU's specific regulation for the cryptocurrency industry, known as the Markets in Crypto-Assets (MiCA), is set to take effect on December 30 across 27 member states. ESMA Chief Verena Ross stated: Looking ahead, as the transition period progresses, we will continue to provide guidance and work with all National Competent Authorities (NCAs) to ensure the smooth implementation of MiCA and support a fair competitive environment through regulatory convergence actions. (Wall Street Journal) reports: The AI unicorn Databricks completed a $10 billion Series J financing round with a valuation of $62 billion, led by Thrive Capital. Santiment released data showing that there are currently 104 whale addresses holding at least 100,000 ETH, accounting for 57.35% of all existing ETH, worth approximately $333.1 billion. On December 18, MtGox-related addresses sent 1,130 BTC to two addresses. BitME co-founder Arthur Hayes stated that the cryptocurrency market will experience a downturn around the time of Trump's inauguration on January 20, 2025. If the market breaks through around January 20, he will acknowledge his prediction error and will re-enter after licking his wounds.
Matrixport stated: From a risk management perspective, the data clearly demonstrates a strong bullish trend: the best performance of the year occurred in February, with a 44% increase; the worst performance was in April, with a 15% decline, and only 3 out of 12 months recorded negative returns. BTC's volatility leans more toward upward rather than concerning downward risks, which solidifies a strong foundation for a robust start in 2025 and reminds many investors of the regret of missing out at the beginning of 2024. Bloomberg analysts Eric Balchunas and James Seyffart predict that the U.S. will see a 'wave of cryptocurrency ETFs' next year, although not all will be launched at once. The first to launch may be the BTC and ETH combined ETF, followed by the LTC ETF, then possibly the HBAR ETF, and finally the Solana/XRP ETF (the latter two have been marked as securities in pending litigation). Bloomberg reported that executives from the digital asset industry are joining technology company executives at Mar-a-Lago to meet with Trump, discussing matters related to BTC reserves and formulating and advancing clear regulations for the crypto industry. On December 18, the U.S. BTC spot ETF saw inflows of $743.98 million; the ETH spot ETF saw inflows of $144.7 million, marking 17 consecutive trading days of net inflows, with BlackRock's ETH ETF currently holding over 1 million ETH. K33 research director Vetle Lunde stated: The assets under management for the U.S. BTC ETF ($129.3 billion) have surpassed those of the U.S. gold ETF ($128.9 billion), despite gold having a 20-year head start.
BlackRock's report states: In the face of rising inflation, U.S. government bonds are no longer a reliable buffer against sell-offs of risk assets such as stocks. U.S. investors should consider using gold and BTC as a supplement to bond investments, rethinking diversification and considering new diversification tools such as gold and BTC, even though they won't replace bonds. Presto's annual report provides a forward-looking forecast for 2025, predicting BTC prices to reach $210,000, the total market value of cryptocurrencies to expand to $7.5 trillion, the ETH/BTC ratio to rebound to 0.05, Solana to break $1,000, the market value of stablecoins to reach $300 billion, and the market value of new EVM Layer 1 public chains to reach $20 billion. One sovereign nation or S&P 500 company will include BTC in their reserves. Historically, BTC's MV/RV (market value/realized value) ratio has fluctuated between 0.4x and 7.7x. In the past two bull markets, BTC's MV/RV peaks were 4.7x and 4x, and adopting a more conservative 3.5x multiple, the target price for BTC in 2025 is $210,000. On Thursday, the Federal Reserve lowered interest rates by 25 basis points to a range of 4.25%-4.5%, marking the third consecutive rate cut, in line with expectations.
The Fed's dot plot shows: Two rate cuts are expected in 2025 (four were expected in September); the median PCE inflation expectations for 2024 to the end of 2026 are 2.4%, 2.5%, and 2.1% (September expectations were 2.3%, 2.1%, and 2.0%); the median long-term interest rate expectations for 2025, 2026, and the long term are 3.9%, 3.4%, and 3.0% (September expectations were 3.4%, 2.9%, and 2.9%). This policy meeting leaned toward hawkish rate cuts, reducing the expected number of cuts next year from four to two while cutting by 25 basis points. U.S. stock indices fell, with the Nasdaq down 2% at one point, the S&P 500 down 1.5%, the Dow Jones down 1.2%, and BTC down 4%. The Fed's long-term interest rate expectations remain at 3%, with September expectations at 2.9%. The frequency of rate cuts is decreasing, and the cycle of rate cuts is being extended, with the long-term neutral rate around 3% (currently 4.25-4.5%). The Fed's rate cut expectations change almost at every meeting, influenced by data on inflation, the economy, and unemployment rates, with a high likelihood of pausing rate cuts in January next year. The pace of rate cuts is slowing, and the environment will not return to monetary tightening; overall inflation and interest rates are on a downward trend, with the cryptocurrency market in a bull cycle. The intermediate policy meetings will continue to cause fluctuations, with significant volatility expected tonight, and the bull market cycle will continue. Powell is holding a press conference, stating that the Fed has no intention of holding BTC. Trump needs to keep working.